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tv   Bloomberg Markets Balance of Power  Bloomberg  January 2, 2018 1:00pm-2:00pm EST

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economy. shery: here are the top stories. a new year is upon us. happy 2018. new challenges for congress and president donald trump. we walk you through the year ahead. tensions over iran. the trump administration threatens new sanctions on the country as nationwide protest cause political turmoil we dig into what is being called the most regulatory shifts in history. ♪ shery: new year, same fiscal things in past -- in washington. lawmakers will be welcome back with their heard -- third deadline to pass a spending bill. leaders will head to the white house to iron out a bipartisan plan to keep the government open. chief washington correspondent kevin cirilli is at the white house with the latest.
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is it too optimistic to expect any sort of deal on immigration and spending? kevin: it is too soon to tell. i have spoken with sources. wellare -- they're very might be the same drama we saw unfold several weeks ago before that holidayk recess. president trump and vice president mike pence are having a working lunch at the white house where they are likely going to address some of their top legislative priority items, including keeping the government open and funding -- funded. their to do list is infrastructure. for could pose problems republicans as several deficit hawks have risen concerns about infrastructure. particularly when it comes to the case of government spending. most to lose, republicans or democrats if they shut down the government? is thathat we have seen
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anytime you have a government shutdown, it is never good for incumbents. that would suggest right now, the majority lot -- party would suggest they are heading into midterms with that partial government shutdown. you talk to any lawmaker or senior administration official, and they will tell you they want to avert that government shutdown. it will be interesting to see if something like immigration or daca will throw a new risk into that -- wrench into that. mitch mcconnell throwing some political cold water on that before the holiday recess saying he thinks we have more time. democrats are united in that. should the president want to work with the democrats on infrastructure, this could be the first opportunity for him to do so. shery: how much will president trump's pledge to build a wall built into negotiations as well? could congress have to pay for the border while in order for the democrats to get some sort of protection? that is a great point. that is where daca comes into
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play. democrats are adamant that they do not want any type of wall to be a part of any type of negotiation deal. on the flipside, this president for righteously as well as his comments on the white house saying that border wall is something that he is very much pushing for. hardline conservatives agree with him on that point. this is headed for an immigration showdown. an election year, is there any real prospect of cutting any spending? all i hear you say is how to add more money into this. kevin: i don't think so, david. i think on the issue of defense spending, that is something several staff republicans have called for within recent days. this week, they will come back. the senate is still in session. this is getting underway. we should note the developments and iran definitely casting a shadow over political discussions in washington. trump tweetingt
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about iran. thank you so much, kevin cirilli. busy 2017.ress had a it looks like it may have another busy year coming up. what does it mean for business and the economy? for answers, we welcome david wessel. " in fed wethor of trust." he comes from washington. what quebec. good to have you. let's start out with what happened in 2017 and they tax overhaul. what affect you think i will have on the u.s. economy in 2018? david: i think it will have a substantial effect. there is every reason to believe some of the strength of the stock market is tied to anticipation of higher corporate earnings because of the tax cut. there will be more money in people's pockets in 2018. that is why most economists are moving up their forecast for growth. particularly in 2018 in the -- in the early part of 2019.
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two big questions. what does the fed do about this? will this lead the fed to raise interest rates more than had been anticipated? i think the answer is yes. the second question, will they overdo it? and we have to pay in 2019 2020 for having had overheated economy in 2018? shery: the tax plan is not helpful for all segments of the economy. how much will provisions that have reduced their mortgage tax elections -- deductions than to the housing market? david: you after member. this is a tax cut. depending on how you count, one -- $1 trillion over two years. economy,ections of the there will be a pay. housing is a good example. it seems to me that housing is strong now. we did not have much house construction. mortgages.blem with home prices are rising now. new construction is up to the momentum of the housing business is pretty strong going into
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2018. where housing prices are high, and they will get hit by that state and local property tax cap, or the limit on mortgage bid auctions, we may see the growth slow. these effects will be more long-term, whereas what is happening in the housing market now is very short term and has to do with recovering from the great recession. david: let's talk about those long-term effects to when he talked about the effects in the economy coming to talk about the stock market. what about things like productivity growth which everyone is concerned about? it is not growing as much as we would like it too. what about wage growth? what does that look like for 2018. looks i think wage growth to me like 2018 may be the year to pick up when you get the unemployment rate down to some level, many economists think it could be a 3.5% by this time next year, you are bound to see wage increases.
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is,real long-term question does this stimulate business investment and does that investment increase into higher productivity growth? if this tax cut is a success from the benefit of history, it will be because it's unleashed a business investment and lead to a productivity boom. if it is a failure, it is because it did not do that. all it did was put a lot of money in the pockets of people who own stock in institutions that own stock, and give us a short-term boost of the economy. don't think anyone knows the answer. everybody who tries to answer this question starts with a conclusion and justifies it. shery: let's say wages grow modestly. could the fed it spooked by inflation and hike four times instead of 30? if so, how will that affect the market and economy? an open think that is question. if the economy picks up steam,
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if inflation starts to pick up, there is every reason to believe the fed would raise rates more than it would have otherwise. and that the fed right now are going through the models and thinking about what a tax-cut will do. i think janet yellen has been very patient and has thought as long as inflation was below target, they should move cautiously. it is an open question what the new fed chair, if he is confirmed, jay powell, will do. think there could be pressure on the fed to raise interest rates. maybe four times this year. i think that will have an adverse affect on the markets. anytime the fed surprises the markets by being hawkish, you are bound to seem negative affects on the stock and by markets. shery: great talking to you. director of the hedge and monetary polity -- policies. check ont's get a whether markets stand. julie hyman is here with the latest. julie: thank you. we are seeing major averages
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rally today. as he can see, the outperformance of the nasdaq is notable. up 1.2%. just about a full percentage point more than the dow's gains. there is an index of stocks, this outperforming, as we continuing to see this large -- these large stocks to kickoff the year. if you look at the individual stocks, you will see that outperformance we have facebook, thatn, netflix, and off of rising. netflix rising on the back of a downgrade. taking a step back as we go into 2018, we have watched the dow, s&p ratio during various administrations. we tend to see the dow outperform the s&p 500 under republican regime. that, at least initially, appears to be the case during the current trump administration. i suspect this would look
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similar if you are looking at the nasdaq. the nasdaq has been doing well and did well last year. look at theresting relative outperformance. we have been talking a lot about recreational marijuana. leading up into the january 1 legalization of it in california. shery, you were talking about this with jenny kaplan. these are the canadian listed pot stocks and how they have done over the past two weeks leading up to this launch. david: thanks a much, julie. up next, lack of u.s. leadership could be to blame for geopolitical tensions. markets ares looking beyond the chaos. more from today's exclusive conversation and eurasian groups headquarters. this is bloomberg. ♪ ♪
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♪ david: mrs. "bloomberg markets: balance of power." -- this is "bloomberg markets: balance of power." shery: never bloomberg first word news. we turn to mark crumpton. the: the airspace over mar-a-lago estate was violated on new year's eve while the president was at the residence. two f-16 fighter jets were patrolling the area when the intercepted the private plane and escorted into an airport. the pilot told officials he was unaware of the flight restrictions. the united nations security council gets its new members today. coast,ial guinea, ivory the netherlands, peru, and poland were installed on the 15 member council. the u.s., china, france, you and the u.k. are permanent members while other countries rotate on two-year terms. hackers in north korea are hijacking computers to mine
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cryptocurrencies. that is according to an analyst at the south korean government. kim jong-un's regime is height -- widening its hunt for cash because of tougher financial restrictions. it would be a nice way to kick up the year by winning a few hundred million dollars. no one has won the mega millions or powerball drawings over the past few weeks. tonight's mega millions is worth 340 $3 million while tomorrow 440t's powerball is worth million. don't quit your day job yet. the odds of winning either one are around $300 million -- bridget million to one. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. nice working with you. david: exactly. enjoy that money. let's turn to bloomberg exclusive. at newur colleagues were york city headquarters where they joined the group's leader
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for a detailed conversation with a jack lew, the former u.s. treasury secretary. he talks about u.s. leadership, the textiles are schlake -- the tax legislation, and the u.s. economy. that underlines so much of it is chaos. it is the unpredictability of key leaders. it is the lack of the north star with united states stepping back. it is this destructive policy without any constructive to take its place. that is true on issue after issue in the united states. look at markets over the last year. the calm this of markets suggests there has been a decision to look beyond this chaos is what can we do about it? when the moment comes when something happens that is as a prize that should not be, i worry about binary changes. >> i want to cut to the january chase. is inmpressed this month washington.
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i want to go back to the who isng of your career, the most basic of politicians from another time. what does your democratic party me -- need to do to provide leadership within this chaos? wish from mr. schumer, ms. policy, and others? jack: democrats are not in charge. i do not think it is fair or realistic to look to democrats to lead the way out of this. you have an administration that chose to make policy in a very one-party way, that did not included democrats in the conversation. now they cannot rally their own troops to do the basic business of running the biz -- running the government, make sure we don't fall on debt, making sure children don't get thrown off health insurance. i think the challenge will be to work together and truly working together does not mean coming and saying we need your vote. it means going back and doing things that you not would have done to reach a consensus around
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a compromise. reasonable compromises the basis for working together we are not seeing that out of the white house. legislationng this is dangerous. why is a dangerous? tax: when you look at the bill, what it does is the opposite of what anxious and angry voters were calling for in the election a year ago. you have people who are worried anut where they fit in economy where technology and trade and globalization seems to be changing all the rules they grew up with. 's we need training, education, infrastructure, we need to invest in the kind of work force the future that gives people the confidence. what we have seen as a tax cut that spends money we do not have, to have very concentrated benefits for global corporations and the top 1%, and it is leaving us broke so we cannot deal with these fundamental problems. we are further than -- further behind than making progress. i fear the next shoe to drop
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will be an attack on the most vulnerable in our society. i will be -- how will we pay for the deficit? you will see cuts from poor people, taking food support away from poor people, to attack medicare and social security. one could not have made a more cynical strategy. >> people are going to reject things that otherwise are good when they do not work for them. good thing for the world. people rejected if they think it does not work for them. technology, a good thing. but they reject it when they see the government works for them. what jack is saying is on the back of this tax bill, if you are going to see cuts for the average people, they -- their response will be greater rejection of the establishment and political polarization. democrats and republicans will have to deal with that. they have existed for a long time. the united states has been spending the money it has not had for a long time. my question is why is this
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different than to what we have seen before? jack: i have been in office in several different periods. i spent three years and running the bandage -- the budget in the clinton administration. we fixed a problem. when i came into the office in the obama administration, we went from a deficit of 10% of gdp to 3% of gdp. we have consciously, intentionally, made the decision to add substantial amounts of debt. what it needs is targeted investment. risk of this task -- tax bill is a further disenchantment within institutions, and if you look at the rejection of institutions -- david: i was a conversation with a jack lew earlier today at the eurasia group headquarters. shery: still ahead, president trump spent 2017 -- said it 2017 was a waste of time looking into
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the collision. will 2018 prove him right or lead into the opposite direction? we will have an update next. this is bloomberg. ♪
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♪ david: this is "bloomberg markets: balance of power." i'm david westin. shery: i'm shery ahn. hanging over washington's business is robert mueller's continuing investigation into russian interference in the 2016 election. it is a pro that has ensnared to top trump campaign officials and an adviser. there is no signs that the investigation is concluding, contrary to the insistence of white house lawyer. here with an update is the managing editor for u.s. government and the trump russia krogh -- probe. give us a sense of where we are at the investigation. is this the middle of the probe? is this near the end of the probe? kevin: i think a straight answer is we do not know.
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this is a big probe. it has a lot of different aspects. we have only had very narrow, limited glances into it. leaks coming from third parties, whether it is lawyers or other officials and sometimes other places. it has been challenging to make sure we have a full picture of where mueller's investigation is. that is by design. this investigation is intended to be done behind closed doors. it is not like this will have a full report at the end of it. report will come in the form of indictments or plea deals. we have seen a little bit. we have seen a couple significant former trump either be already indicted or have some kind of plea deal. everyone is assuming there could be more to come. we really do not know the next steps. a beasley, we saw some action back at the end of october. we saw more in december. everyone is anticipating that if there is more to come, it could
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come in the next few weeks as the special counsel tries to keep -- david: is making progress. and pieces tidbits that we have that this may be going in a financial transaction? that seems to be one of the real third rails for the president and his administration if this goes into financial dealings. kevin: it is a big question. at various points there have been looks at certain kinds of financial dealings. some of that involves cases we have already seen. some of that relates to trump's former campaign manager, paul manafort, who has been indicted. atknow there has been looks financial records. it is hard to get a sense of how far they have gone into the president's own financial records or other family members of his. that is more of an unclear sign. there is some reason to believe that that has not happened yet. but, i think we are trying to
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figure out where that is. so far, a lot of the cases seem to be involving some of the associates, building methodical things. in many cases, you are seeing plea deals related to more minor charges than some of the others that they could be facing. there are questions about what kind of cooperation is going on, what they are talking about, and what that might lead to. at the point of an investigation that is near the beginning. trump's had some of legal team trying to suggest, no, we have done our interviews, we are about to wrap up. this thing will be over. that is not the expectation we have at this point. we are all being kept in suspense. shery: president trump saying there is collusion between the russians and the democrats because the dnc had paid for the dust year. how much momentum could that gain and how would that impact the moliere investigation -- the molar investigation? kevin: there have been a lot of
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efforts of credibility of the fbi and the justice department. there are plenty of reason to believe the dossier was not the originaligator for the investigation. more importantly, a lot of people are having trouble believing the bureau is particularly anti-trump. we know there are plenty of critics with -- critics of hillary clinton within that area. the evidence will speak to itself. or not. shery: thank you so much. great having you with us. straight ahead, nationwide protests continue across iran with a 1000 people arrested for taking to the streets. we will have the latest next. this is bloomberg. ♪ is this a phone?
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see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to david: this is bloomberg markets: balance of power. i'm david westin. shery: i'm shery ahn. we are seeing a strong equities rally in the first day of the trading day for the year.
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5%.dow is up .2 materials and consumer stocks leading. the s&p 500 is also gaining with health care stocks the biggest gainers on the index. havingdaq up 1.2% after its best year since 2013. of take a look at the markets. brazil's stocks leading the gains. the highest level on record following commodities higher. we had better chinese data. weakness across the dollar. we are seeing some strength for other currencies. we continue to see the pound rallying after touching a some-month high and positive u.k. manufacturing data for december. take a look at commodities because natural gas is gaining. consumption of gas on monday at the highest on rutgers. we are seeing the european curve steepening following the u.s.
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steepening weakness across treasuries. a very busy week for the bond markets and italy leading the selloff. this is a look at the markets. david: let's get the first word headlines from mark crumpton. >> president trump is wasting little time setting his 2018 legislative agenda after arriving back at the white house following his vacation. reportedly sending top aides capitol hill tomorrow to meet with house speaker paul ryan. he is hoping to keep his congressional momentum going after scoring his first major win with the tax overhaul. al franken is spending his last day as a u.s. senator. he formally submitted his resignation letter to the governor of minnesota today. smith,lacement, tina will be sworn in tomorrow. franken was forced to resign after several women came forward and said he groped them.
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the u.s. general commanding the fight against islamic state warns the terrorist group is still a danger. lostys islamic state has 90% of the land it had once controlled in syria and iraq. he wrote online that the group could still continue as a shadow terror outfit without a base. the u.s. is calling on iran to unblock social media sites. the government is blocking such sites as instagram and telegram which iranians were using to share news about the protests. the u.s. is encouraging iranians to use virtual private networks to gain access to block sites. -- blocked sites. global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. the protests in iran
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continue. the trump administration is .hreatening new sanctions people took to the streets rallying against rising prices and the economy. it quickly turned into a greater referendum on the country's political establishment. anthony from the center for strategic and international studies. thank you for your time today. let's talk about these protests because iran is now blaming this on saudi arabia's social media campaign to make things worse. how will this worsen the relationship between the countries and how the u.s. plays into this dynamic? >> it's very unlikely to worsen it because relations are about as bad as you can be without having actual military incidents. and quite frankly iran is simply trying to deflect what are very serious problems in its economy
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in the economic status of its people and its rising property rate -- poverty rate. it is not going to alter its relations with saudi arabia and the united states as long as there's no military incident. david: it's david westin. tell us what effect this will have on the regime over there. will this make them more moderate or could it hard in the lines? >> it's a great question because this has been an ongoing struggle. it was a struggle under the previous president. since the president took office in 2013 he clearly has advocated development, economic reform, reaching out to the rest of the world while the supreme leader has seemed to tilt towards the revolutionary guards, the of iranian advocates
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military buildup and action in neighboring states. competitiona direct if there's going to be any form of economic reform that benefits the people. iran is still at very low levels of oil revenue. it is not developing. and the only way it can afford to make real economic reform is to put sharp limits on its military spending. trump has beent drawing attention to the iran rallies tweeting several times about this. how is this likely to affect protesters themselves because they may not necessarily want to be seen as pro-west were very closely tied to president trump. good point because quite frankly the last thing on earth that is going to help protesters in iran is to have to tie theme able not only to the united states
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but somehow as weakening iran in the face of an arab threat. it is one thing to offer support to encourage reform. at if you somehow become source of identification, a u.s. sponsorship of these uprisings and demonstrations, you do serious harm to the demonstrators. david: i want to turn back to abc. we had admiral mike mullen on this week. he said he thinks we are closer timenuclear war than any in recent memory given the standoff in north korea. are we in that dangerous a position from your assessment? >> i would not time have been tt negative. i think the problem everyone has his we are not talking conventional military analysis. we are talking the sinking of
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one man effectively the dictator of north korea. to guess at how far he will go, how extreme he will be coming it becomes almost impossible to know the degree to which this is bluster or rhetoric or reality. i think it's important to note that just in the last day or two he has reached out to south korea. he is basically attempting to games ininter improving relations with south korea to counter u.s. influence. that's not exactly the prelude to nuclear war. shery: but then again you have president trump tweeting this morning that sanctions and other pressures are beginning to have a big impact on north korea. soldiers are dangerously cling to south korea. to talk tonow wants south korea for the first time. perhaps that's good news. perhaps not.
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we'll see. i really don't understand what the u.s. strategy is here. this is just basically throwing cold water at the prospect. >> the real question you have is how important are these tweets and what is the lasting effect in terms of even the president's rhetoric? i think the reality is having a couple of defectors run across the demilitarized zone is scarcely a sign the north korea is in trouble. if you're going to add sanctions, what sanctions? it's not much left that you can actually add and you can't simultaneously talk about their impact and then accuse china and russia of not actually enforcing them. i think that we have had perhaps a great deal of hard-line rhetoric this morning but that's
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not necessarily an indication that you are going to see either a risk of war or even the u.s. somehow step up its pressure on north korea in any meaningful way. shery: good point. anthony, thank you for your time. david: coming up, explaining mifid coming up, explaining mifid ii. new financial blog going into effect tomorrow that aims to make european markets more transparent and competitive. this is bloomberg. ♪ new financial blog going into effect tomorrow that aims to make european effect tot aims to make european
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david: this is bloomberg markets: balance of power. i'm david westin. shery: i'm shery ahn. disney is higher on an upgrade to outperform. talking abouttle mccrory upgrading netflix as well. abigail: a bullish morning mediaing both of these companies. they like this company for lots of different reasons. , theistribution, the ip fox assets. in white we have the stock. for theically sidelined last two years. revenue growth is down. over the last several decades disney just going in the right direction and lots of revenue growth. they really need to figure out how to get revenue growth going in the right direction.
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big piece of the problem has been espn. they have developed two apps. there's one that's coming out this year. disney streaming or disney specific content. in 2019 espn which seems very appropriate. i worked there for quite a few years. when you talk about ford cutting is the theory basically can't be them, join them? the theory is to take on netflix. a piece i think that is of it. you just want to grow. they are truly the biggest entertainment company in the world and if we hop back into the bloomberg and take a look at the financial analysis because of the fox assets we now have revenue growth growing in the right direction. negative territory in 2017.
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in 2018 we're looking at revenue growth. it's kind of bumpy. time will tell whether or not it's going to work out in terms .f fx we have the theme park. so much going on. right now getting a boost from mccrory. david: that is revenue growth. there is another thing called cost. abigail: the integration. let's see how that goes. david: thank you. shery: everybody in european finance has been abuzz over an obscure acronym, mifid ii. it's about to change how assets are treated. ii or to give it its full name, the markets in financial instruments directive 2 is the european union's second big push at regulating markets. it will rewrite the rules for
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how information is shared, how prices are set, even how brokers pay one another. and it starts very soon. the first iteration was in 2007 and harmonized rules for stock trading. then the financial crisis hit and in its wake policymakers decided more was needed. ambition is to extend the harmonization to , derivativesbonds and beyond. many securities are still traded in broker to broker deals. new regulations will force much of this onto open and regulated platforms. with automated trading making up half of all trades and several high-profile crashes blamed on this, algorithms must be registered with regulators. they will be tested and have to include circuit breakers to shut them down. , derivatives and beyond. manyit's not just the machines r scrutiny. bankrch long provided by analysts and paid for by trading commissions will now have to be paid for separately. were not given at all. and what happens in europe doesn't stay there.
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the regulators will extend to any institution trading european securities no matter where they are. none of this comes cheap. regulators estimate it will cost financial firms over $800 million to implement the systems to be compliant. all the while the clock is ticking towards mifid ii's january deadline. managersnks and asset have spent more than $2 billion getting ready for mifid ii. how is it going to work in practice? how does this really work? does midnight come and we flip the switch? >> not quite. banks and asset managers decide when they want to flip the switch themselves. some of the people will be doing it when they come in to work tomorrow morning. the money has gone around
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compliant systems to see if you can keep all these traits from to five years so that even when happens the regular readers can piece together quickly what happened and who had an overexposure of risk and how they can prevent those mistakes happening again. shery: if the firms make happens the regular readers can piece together quickly whatmistakes and they ht to regulators given that this is still the launch nothing is really set concretely will regulators be a little more lenient when it's the start of the new system? >> absolutely. regulators in recent weeks realized basically the industry wasn't ready for this. they had hearty given a one-year asset managers and banks weren't able to get ready in time. in part that was the regulators fault because they delayed questions and answers which would have allowed the industry more time to prepare. have said as long as you have made an honest effort to get ready for this legislation they won't penalize you certainly in the first couple of
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months. towards the end of the first quarter we are going to see more and more of the legislation clicking in and by midyear it should be implemented. david: regulators like to talk about efficiency and transparency. who is going to save money off of this and? who is going to spend more? >> the winners and losers are the big thanks that will be able to provide research were better execution and then at the other smaller research providers are expected to find a way to get customer base with their and charge a lot to very few customers for trading ideas. investment banks in the middle will probably suffer. smaller asset managers and smaller hedge funds who have to pay a lot towards compliance will also suffer. is probablyner going to be the retail investor,
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the mom-and-pop investor who will hope fully end up with a better deal on fees. people are moving more into the markets. pensions move from contributions to benefit. europeananging the way people invest and they hope to get a better deal from them as a result. david: thank you, neil callanan reporting from london. shery: the search to fill one of the trickiest jobs in central banking. diversity might play an important role in finding a replacement for outgoing new york fed president bill dudley. this is bloomberg. ♪
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david: this is bloomberg markets: balance of power. i'm david westin. shery: i'm shery ahn. nikki haley speaking right now to the press at a un security council meeting in new york. she says the iran demonstrations
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are not fueled by outside powers. the demonstrations have been going on for the past five days and have spread to different parts of the country including tehran. ofn had accused saudi arabia waging a social media campaign to take advantage of the protest. areis also saying iranians showing great bravery in the protest and that the united nations must speak out on these protests. we have already heard from president trump tweeting over the last couple of days about and that the people are finally acting against the brutal regime. that's nikki haley speaking to the press. david: brave words from the president and nikki haley. in the past it hasn't affected what has gone on in iran. shery: we are hearing again they are supporting these protests in iran. david: the next president of the new york fed will have to meet a long list of requirements. the stakes are high for the
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replacement of outgoing president bill dudley, a voting member of the fomc. for more on the process, let's doing in bloomberg's fed reporter. thatave a piece out describes the people being considered. it's a different sort of list. >> absolutely. one thing that has been really important to the new york fed process is finding a diverse pick. they're looking for diverse candidates and the search committee has been consulting all of the new york fed advisory committees. they are casting a wide net right now. shery: how tricky is filling this hard? >> incredibly hard. you need someone who understands monetary policy. you need someone who understands financial markets because they're overseeing all of the big new york bank supervision. you have to have someone who really understands how market operations work because the new york fed is tasked with setting interest rates. you have to thread the needle
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with all of those various qualifications. david: in the bloomberg report there's a long list of people which includes several women. more than one african-american. in the past have they chosen from a long list like that has there been an heir apparent? >> one thing that's unique and interesting about this process is we know a lot more about how they are going about the process than in the past. you just kind of know what's happening and then you get a name at the end of the process. who they're know talking to. a lot of them are willing to say i put forth this name so we know some of the suggestions. i think we have a better view of what the candidate list looks like and that is a diverse list. shery: do we have a better sense of what the criteria is? >> absolutely. they have put out a very detailed document listing what they're looking for. , some sort ofnce
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understanding of banking ofulation and some sort understanding of monetary policy. one of the big questions is whether it will be an economist or not. david: as a practical matter, who gets to decide? when it comes to a pointing members to the federal reserve board the president gets to nominate them. this is a different process. >> they will submit names to a board of directors at the new york fed and the directors on makeew york fed board will that decision and send it to the board of governors in washington and that's how the process works. various people get to touch the process. shery: dudley was saying he is going to retire in the middle of the year. >> six to nine months is what they are shooting for. and it sounds like they are about on track. thank you for that. sign up for the balance of power newsletter at bloomberg
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get the latest on global politics in your inbox every day. david: coming up, we will talk about what will drive equities next year. a hot topic on everybody's list right now. we want to remind you once again that you can catch all of our interviews on the bloomberg. you can also find breaking news, charts and related functionality. just go to tv on your bloomberg. live from new york, this is bloomberg. ♪
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>> i'm scarlet fu. >> and i'm julia chatterley. welcome to bloomberg markets.
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scarlet: we are live at bloomberg new york headquarters. here are the top stories we are covering. old a new year but the same sticking point for president trump and congress. what will get done when it comes to issues from immigration government spending? we look at the prime opportunities with morgan stanley's chief u.s. equity strategist. plus is amazon's next target target itself? gene munster says it will happen this year that doesn't make sense for either company? we've got u.s. markets closing in two hours time. we got a rally today. once again we are seeing the divergence that characterized late november or early december. the


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